Technology, Change & Transformation Update - July 2018

Fri, July 20, 2018

The market

“The asset management market is an interesting place and ‘Brexit doesn’t just mean Brexit’ - it also means change and lots of recruitment. During the last three months we have seen a large proliferation of the need for project focused BA’s, PM’s and Developers to work on specialist initiatives. As always, the main challenge for many firms is pin-pointing and securing specialist talent at the right time. In short, there just isn’t enough talent to meet the demand” - Matt Cameron, Managing Director.

Since our last update

The 3 key areas of demand have been:

Data-driven development

New fund launches

Brexit regulation

Contract versus permanent demand

62% of the roles we have assisted with have been contract and 38% permanent. This is due to increase in project based requirements over the last three months. A number of requirements have been altered to contract when permanent candidates haven’t be available.

Key trends

There has been a significant rise in the number of fund launch projects taking place in various asset managers. This can be explained by the large number of company mergers (such as Standard Life Investments & Aberdeen Asset Management, Janus and Henderson Global Investors, Allianz Global Investors and Rogge Global Partners etc) and de-merges (such as M&G and Prudential) that have been, and still are, taking place. Many firms are also launching new funds outside of the UK to mitigate any impact of Brexit.

New fund launches are classically symptomatic of such large events, as the scope and demand for new products increases due to cross-company fund combinations and splits. Other firms, such as Legal & General Investment Management have recently launched a ‘Girls Fund’ dedicated to the diversity and inclusion agenda. LGIM aim to “engage the nation” by showing the positive contribution that can come from investing and dispelling the myth it is only for the wealthy. AGI have, just today, announced the launch of a new fixed income macro fund.

BNY Mellon has announced that it has revamped the product lineup in its asset management division as the custody bank tries to offer lower-cost funds that investors prefer. ETF’s have also been on the rise over the last couple of years, with 50 new ETF products reported by the European ETF industry, but given such a near record-long bull market run, the future of ETF funds is under question, as many fear the peak is soon to be reached.

Recruitment demand is also being driven by data and regulatory measures – asset management relies on data, companies must constantly compete with other to increase their ability to efficiently pull data into the company, consolicate and distribute, all the while ensuring that this data remains accurate, is delivered in a timely manner and is economical to the company’s budget restrictions.

As such, companies ensure the way their systems work and the way their processes flow are optimal. This gives rise to a whole host of upgrades, implementations and enhancements and also the continual re-design of processes and future operating models in order to keep up with the competition. On the regulatory side, companies must simply adjust all systems and processes to avoid large fines from the FCA. Some firms haven’t been able to avoid this.

MiFID II has also been keeping us busy. The FCA has pledged to review MiFID II six months after it came into force and sector thought leaders “believe it must get tough with non-conforming firms”. Therefore we are seeing continued demand for Mifid II specialists as firms scramble to ensure compliance. GDPR is also a hot area. We are therefore seeing a vast increase in the demand for regulatory change contractors who are able to command significant levels of compensation for specialist knowledge. It is a good time to be in regulatory change and this trend isn’t going away.

Dublin continues to a hot bed of hiring for technology talent with a number of firms recruiting in Ireland. Charles River Development’s offices is growing as are firms such as Fidelity, Goldman Sachs Asset Management and Smith & Williamson. From the conversations we have had there are many more soon to follow.

Diversity

One topic that is certainly becoming more and more of a talking point for all financial services companies is diversity. Banking have been doing this for a while however, investment management is just getting started. The ability for a company to demonstrate its efforts towards creating and maintaining an environment that is diverse and inclusive is becoming a mandatory requirement, that is also becoming measurable too. Investors are also asking more and more about talent strategies before they invest.

Major UK companies are beginning to pull each other up on gender and race diversity – the co-founder of a London communications group was invited to pitch for business with a Wall Street firm last November, however the offer came with an unusual demand. 15% of the scorecard for the pitch was based on the firm being able to show its commitment to diversity and inclusion. This needn’t be a problem, rather be seen as an opportunity.

As we move into a world where the asset management industry is increasingly affected by technology, the sector is, for the first time, needing to attract talent from other industries. This means that there is a real opportunity to increase the size and type of pool from which talent is sourced (AKA the Ocean!) in order to ensure companies are able to find the best possible technical skills at the best possible time.

During the last quarter we have encouraged asset management firms to think about excellent technical talent not from our industry but from another. For example, we have worked with the client to help them focus on objective-based hiring as opposed to hiring a mirror image. This process delivered a hire from the retail industry who is not only one of the few females in technology, but also a return to work mum. This is what recruiting from a broader pool is all about.

In this year’s PwC’s CEO survey, 69% of UK CEOs said that they believe emerging technologies – such as artificial intelligence, blockchain and robotics — will disrupt their current business models in the next five years. So we asked PwC to collaborate on an event with us for the second year running. The session was led by David Moloney, Director - Innovation & Transformation and Elizabeth Stone, Partner - UK asset and wealth management leader.

PwC concluded by stating that “predicting the future is difficult, however it can help to imagine different possibilities”. Their report is a useful model for tackling uncertainty and the unknown. It has six key messages for leaders:

1. Act now

2. Make no-regret moves

3. Make a bigger leap

4. Own the automation debate

5. Focus on people, not jobs

6. Build a clear narrative

Firms leading the way with the technology agenda appear to be Blackrock, Schroders and M&G Investments, all of whom have technology centres of excellence. Please contact us if you wish to receive the event paper.

Market Predictions

Regulatory Projects. Over the next three months we expect to see a further increase in firms preparing for a potential no-deal Brexit following the governments recent commitment to preparing for this eventuality.

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D&I Metrics

What gets measured gets done. That is why we collect diversity metrics on both our candidates and clients in line with the Data Protection and Equality Acts. This allows us to identify areas requiring additional focus and also to measure progress across the industry. With biases prevalence through the employee lifecycle we actively utilize our diversity data to demonstrate where barriers exist and to create solutions to overcome them.